REGISTRATION RIGHTS AGREEMENT
Exhibit
4.4
This
Registration Rights Agreement (this “Agreement”) is made and entered into as of
August 25, 2006, by and between Blast Energy Services, Inc., a California
corporation (the “Company”), and Laurus Master Fund, Ltd. (the “Purchaser”).
This
Agreement is made pursuant to the Securities Purchase Agreement, dated as
of the
date hereof, by and between the Purchaser and the Company (as amended, restated,
modified or supplemented from time to time, the “Purchase Agreement”), and
pursuant to the Warrants referred to therein.
The
Company and the Purchaser hereby agree as follows:
1.Definitions.
Capitalized terms used and not otherwise defined herein that are defined
in the
Purchase Agreement shall have the meanings given such terms in the Purchase
Agreement. As used in this Agreement, the following terms shall have the
following meanings:
“Commission”
means
the Securities and Exchange Commission.
“Common
Stock”
means
shares of the Company’s common stock, par value $0.001 per share.
“Effectiveness
Date”
means,
(i) with respect to the Registration Statement required to be filed in
connection with the Warrants issued on the date hereof, a date no later than
one
hundred eighty (180) days following such date and (ii) with respect to each
additional Registration Statement required to be filed hereunder (if any),
a
date no later than thirty (30) days following the applicable Filing
Date.
“Effectiveness
Period”
has the
meaning set forth in Section 2(a).
“Exchange
Act”
means
the Securities Exchange Act of 1934, as amended, and any successor
statute.
“Filing
Date”
means,
with respect to (1) the Registration Statement required to be filed in
connection with the shares of Common Stock issuable to the Holder upon exercise
of a Warrant, the date which is sixty (60) days after the issuance of such
Warrant, and (2) the Registration Statement required to be filed in connection
with the shares of Common Stock issuable to the Holder as a result of
adjustments to the Exercise Price made pursuant to Section 4 of the Warrant
or
otherwise, thirty (30) days after the occurrence of such event or the date
of
the adjustment of the Exercise Price.
“Holder”
or
“Holders”
means
the Purchaser or any of its affiliates or transferees to the extent any of
them
hold Registrable Securities, other than those purchasing Registrable Securities
in a market transaction.
“Indemnified
Party”
has the
meaning set forth in Section 5(c).
“Indemnifying
Party”
has the
meaning set forth in Section 5(c).
“Proceeding”
means an
action, claim, suit, investigation or proceeding (including, without limitation,
an investigation or partial proceeding, such as a deposition), whether commenced
or threatened.
“Prospectus”
means
the prospectus included in a Registration Statement (including, without
limitation, a prospectus that includes any information previously omitted
from a
prospectus filed as part of an effective registration statement in reliance
upon
Rule 430A promulgated under the Securities Act), as amended or supplemented
by
any prospectus supplement, with respect to the terms of the offering of any
portion of the Registrable Securities covered by such Registration Statement,
and all other amendments and supplements to the Prospectus, including
post-effective amendments, and all material incorporated by reference or
deemed
to be incorporated by reference in such Prospectus.
“Purchase
Agreement”
has the
meaning given to such term in the Preamble hereto.
“Registrable
Securities”
means
the shares of Common Stock issuable upon exercise of the Warrants.
“Registration
Statement”
means
each registration statement required to be filed hereunder, including the
Prospectus therein, amendments and supplements to such registration statement
or
Prospectus, including pre- and post-effective amendments, all exhibits thereto,
and all material incorporated by reference or deemed to be incorporated by
reference in such registration statement.
“Rule
144”
means
Rule 144 promulgated by the Commission pursuant to the Securities Act, as
such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect
as such
Rule.
“Rule
415”
means
Rule 415 promulgated by the Commission pursuant to the Securities Act, as
such
Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission having substantially the same effect
as such
Rule.
“Securities
Act”
means
the Securities Act of 1933, as amended, and any successor statute.
“Trading
Day”
means
each day the Trading Market on which the Common Stock is traded is open and
available to trade securities.
“Trading
Market”
means
any of the NASD Over The Counter Bulletin Board, NASDAQ Capital Market, the
NASDAQ National Markets System, the American Stock Exchange or the New York
Stock Exchange.
“Warrants”
means
the Common Stock Purchase Warrants issued in connection with the Purchase
Agreement, whether on the date thereof or thereafter.
2. Registration.
(a) On
or
prior to each Filing Date, the Company shall prepare and file with the
Commission a Registration Statement covering the Registrable Securities for
a
selling stockholder resale offering to be made on a continuous basis pursuant
to
Rule 415. Each Registration Statement shall be on Form S-3 (except if the
Company is not then eligible to register for resale the Registrable Securities
on Form S-3, in which case such registration shall be on another appropriate
form in accordance herewith). The Company shall cause each Registration
Statement to become effective and remain effective as provided herein. The
Company shall use its best efforts to cause each Registration Statement to
be
declared effective under the Securities Act as promptly as possible after
the
filing thereof, but in any event no later than the Effectiveness Date. The
Company shall use its best efforts to keep each Registration Statement
continuously effective under the Securities Act until the date which is the
earlier date of when (i) all Registrable Securities covered by such Registration
Statement have been sold or (ii) all Registrable Securities covered by such
Registration Statement may be sold immediately without registration under
the
Securities Act and without volume restrictions pursuant to Rule 144(k), as
determined by the counsel to the Company pursuant to a written opinion letter
to
such effect, addressed and acceptable to the Company’s transfer agent and the
affected Holders (each, an “Effectiveness Period”).
(b) If:
(i)
the Registration Statement is not filed on or prior to the Filing Date;
(ii) the
Registration Statement is not declared effective by the Commission by the
Effectiveness Date; (iii) after the Registration Statement is filed with
and
declared effective by the Commission, the Registration Statement ceases
to be
effective (by suspension or otherwise) as to all Registrable Securities
to which
it is required to relate at any time prior to the expiration of the
Effectiveness Period (without being succeeded immediately by an additional
registration statement filed and declared effective) for a period of time
which
shall exceed 30 days in the aggregate per year (defined as a period of
365 days
commencing on the date the Registration Statement is declared effective)
or more
than 20 consecutive calendar days; or (iv) the Common Stock is not listed
or
quoted, or is suspended from trading on any Trading Market for a period
of three
(3) consecutive Trading Days (provided the Company shall not have been
able to
cure such trading suspension within 30 days of the notice thereof or list
the
Common Stock on another Trading Market); (any such failure or breach being
referred to as an "Event," and for purposes of clause (i) or (ii) the date
on
which such Event occurs, or for purposes of clause (iii) the date which
such 30
day or 20 consecutive day period (as the case may be) is exceeded, or for
purposes of clause (iv) the date on which such three (3) Trading Day period
is
exceeded, being referred to as "Event Date"), then until the applicable
Event is
cured, the Company shall pay to each Holder an amount in cash, as liquidated
damages and not as a penalty, equal to 1.0% for each thirty (30) day period
(prorated for partial periods) on a daily basis of the original principal
amount
of the Note; provided that, the maximum aggregate amount of liquidated
damages
that may be charged to the Company pursuant to this Section 2(b) shall
not
exceed 107.5%
of the
initial Principal Amount of the Term Note. While such Event continues,
such
liquidated damages shall be paid not less often than each thirty (30) days.
Any
unpaid liquidated damages as of the date when an Event has been cured by
the
Company shall be paid within three (3) days following the date on which
such
Event has been cured by the Company.
(c) Within
three business days of the Effectiveness Date, the Company shall cause its
counsel to issue a blanket opinion in the form attached hereto as Exhibit
A to
the transfer agent stating that the shares are subject to an effective
registration statement and can be reissued free of restrictive legend upon
notice of a sale by the Purchaser and confirmation by the Purchaser that
it has
complied with the prospectus delivery requirements, provided that the Company
has not advised the transfer agent orally or in writing that the opinion
has
been withdrawn. Copies of the blanket opinion required by this Section 2(c)
shall be delivered to the Purchaser within the time frame set forth above.
3.Registration
Procedures.
If and
whenever the Company is required by the provisions hereof to effect the
registration of any Registrable Securities under the Securities Act, the
Company
will, as expeditiously as possible:
(a) prepare
and file with the Commission a Registration Statement with respect to such
Registrable Securities, respond as promptly as possible to any comments received
from the Commission, and use its best efforts to cause such Registration
Statement to become and remain effective for the Effectiveness Period with
respect thereto, and promptly provide to the Purchaser copies of all filings
and
Commission letters of comment relating thereto;
(b) prepare
and file with the Commission such amendments and supplements to such
Registration Statement and the Prospectus used in connection therewith as
may be
necessary to comply with the provisions of the Securities Act with respect
to
the disposition of all Registrable Securities covered by such Registration
Statement and to keep such Registration Statement effective until the expiration
of the Effectiveness Period applicable to such Registration
Statement;
(c) furnish
to the Purchaser such number of copies of the Registration Statement and
the
Prospectus included therein (including each preliminary Prospectus) as the
Purchaser reasonably may request to facilitate the public sale or disposition
of
the Registrable Securities covered by such Registration Statement;
(d) use
its
best efforts to register or qualify the Purchaser’s Registrable Securities
covered by such Registration Statement under the securities or “blue sky” laws
of such jurisdictions within the United States as the Purchaser may reasonably
request, provided, however, that the Company shall not for any such purpose
be
required to qualify generally to transact business as a foreign corporation
in
any jurisdiction where it is not so qualified or to consent to general service
of process in any such jurisdiction;
(e) list
the
Registrable Securities covered by such Registration Statement with any
securities exchange on which the Common Stock of the Company is then listed;
(f) immediately
notify the Purchaser at any time when a Prospectus relating thereto is required
to be delivered under the Securities Act, of the happening of any event of
which
the Company has knowledge as a result of which the Prospectus contained in
such
Registration Statement, as then in effect, includes an untrue statement of
a
material fact or omits to state a material fact required to be stated therein
or
necessary to make the statements therein not misleading in light of the
circumstances then existing; and
(g) make
available for inspection by the Purchaser and any attorney, accountant or
other
agent retained by the Purchaser, all publicly available, non-confidential
financial and other records, pertinent corporate documents and properties
of the
Company, and cause the Company’s officers, directors and employees to supply all
publicly available, non-confidential information reasonably requested by
the
attorney, accountant or agent of the Purchaser.
4.Registration
Expenses.
All
expenses relating to the Company’s compliance with Sections 2 and 3 hereof,
including, without limitation, all registration and filing fees, printing
expenses, fees and disbursements of counsel and independent public accountants
for the Company, fees and expenses (including reasonable and customary counsel
fees) incurred in connection with complying with state securities or “blue sky”
laws, fees of the NASD, transfer taxes, fees of transfer agents and registrars,
and fees of, and disbursements incurred by, one counsel for the Holders,
are
called “Registration Expenses”. All selling commissions applicable to the sale
of Registrable Securities, including any fees and disbursements of any special
counsel to the Holders beyond those included in Registration Expenses, are
called “Selling Expenses.” The Company shall only be responsible for all
Registration Expenses.
5.Indemnification.
(a) In
the
event of a registration of any Registrable Securities under the Securities
Act
pursuant to this Agreement, the Company will indemnify and hold harmless
each
Holder, and its officers, directors and each other person, if any, who controls
such Holder within the meaning of the Securities Act, against any losses,
claims, damages or liabilities, joint or several, to which such Holder, or
such
persons may become subject under the Securities Act or otherwise, insofar
as
such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any Registration Statement under which
such
Registrable Securities were registered under the Securities Act pursuant
to this
Agreement, any preliminary Prospectus or final Prospectus contained therein,
or
any amendment or supplement thereof, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to
be
stated therein or necessary to make the statements therein not misleading,
and
will reimburse such Holder, and each such person for any reasonable legal
or
other expenses incurred by them in connection with investigating or defending
any such loss, claim, damage, liability or action; provided, however, that
the
Company will not be liable in any such case if and to the extent that any
such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged omission so
made in
conformity with information furnished by or on behalf of the Purchaser or
any
such person in writing specifically for use in any such document.
(b) In
the
event of a registration of the Registrable Securities under the Securities
Act
pursuant to this Agreement, the Purchaser will indemnify and hold harmless
the
Company, and its officers, directors and each other person, if any, who controls
the Company within the meaning of the Securities Act, against all losses,
claims, damages or liabilities, joint or several, to which the Company or
such
persons may become subject under the Securities Act or otherwise, insofar
as
such losses, claims, damages or liabilities (or actions in respect
thereof)
arise
out
of or are based upon any untrue statement or alleged untrue statement of
any
material fact which was furnished in writing by the Purchaser to the Company
expressly for use in (and such information is contained in) the Registration
Statement under which such Registrable Securities were registered under the
Securities Act pursuant to this Agreement, any preliminary Prospectus or
final
Prospectus contained therein, or any amendment or supplement thereof, or
arise
out of or are based upon the omission or alleged omission to state therein
a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse the Company and each such person
for
any reasonable legal or other expenses incurred by them in connection with
investigating or defending any such loss, claim, damage, liability or action,
provided, however, that the Purchaser will be liable in any such case if
and
only to the extent that any such loss, claim, damage or liability arises
out of
or is based upon an untrue statement or alleged untrue statement or omission
or
alleged omission so made in conformity with information furnished in writing
to
the Company by or on behalf of the Purchaser specifically for use in any
such
document. Notwithstanding the provisions of this paragraph, the Purchaser
shall
not be required to indemnify any person or entity in excess of the amount
of the
aggregate net proceeds received by the Purchaser in respect of Registrable
Securities in connection with any such registration under the Securities
Act.
(c) Promptly
after receipt by a party entitled to claim indemnification hereunder (an
“Indemnified Party”) of notice of the commencement of any action, such
Indemnified Party shall, if a claim for indemnification in respect thereof
is to
be made against a party hereto obligated to indemnify such Indemnified Party
(an
“Indemnifying Party”), notify the Indemnifying Party in writing thereof, but the
omission so to notify the Indemnifying Party shall not relieve it from any
liability which it may have to such Indemnified Party other than under this
Section 5(c) and shall only relieve it from any liability which it may have
to
such Indemnified Party under this Section 5(c) if and to the extent the
Indemnifying Party is prejudiced by such omission. In case any such action
shall
be brought against any Indemnified Party and it shall notify the Indemnifying
Party of the commencement thereof, the Indemnifying Party shall be entitled
to
participate in and, to the extent it shall wish, to assume and undertake
the
defense thereof with counsel satisfactory to such Indemnified Party, and,
after
notice from the Indemnifying Party to such Indemnified Party of its election
so
to assume and undertake the defense thereof, the Indemnifying Party shall
not be
liable to such Indemnified Party under this Section 5(c) for any legal expenses
subsequently incurred by such Indemnified Party in connection with the defense
thereof; if the Indemnified Party retains its own counsel, then the Indemnified
Party shall pay all fees, costs and expenses of such counsel, provided, however,
that, if the defendants in any such action include both the Indemnified Party
and the Indemnifying Party and the Indemnified Party shall have reasonably
concluded that there may be reasonable defenses available to it which are
different from or additional to those available to the Indemnifying Party
or if
the interests of the Indemnified Party reasonably may be deemed to conflict
with
the interests of the Indemnifying Party, the Indemnified Party shall have
the
right to select one separate counsel and to assume such legal defenses and
otherwise to participate in the defense of such action, with the reasonable
expenses and fees of such separate counsel and other expenses related to
such
participation to be reimbursed by the Indemnifying Party as incurred.
(d) In
order
to provide for just and equitable contribution in the event of joint liability
under the Securities Act in any case in which either (i) the Purchaser, or
any
officer,
director
or controlling person of the Purchaser, makes a claim for indemnification
pursuant to this Section 5 but it is judicially determined (by the entry
of a
final judgment or decree by a court of competent jurisdiction and the expiration
of time to appeal or the denial of the last right of appeal) that such
indemnification may not be enforced in such case notwithstanding the fact
that
this Section 5 provides for indemnification in such case, or (ii) contribution
under the Securities Act may be required on the part of the Purchaser or
such
officer, director or controlling person of the Purchaser in circumstances
for
which indemnification is provided under this Section 5; then, and in each
such
case, the Company and the Purchaser will contribute to the aggregate losses,
claims, damages or liabilities to which they may be subject (after contribution
from others) in such proportion so that the Purchaser is responsible only
for
the portion represented by the percentage that the public offering price
of its
securities offered by the Registration Statement bears to the public offering
price of all securities offered by such Registration Statement, provided,
however, that, in any such case, (A) the Purchaser will not be required to
contribute any amount in excess of the public offering price of all such
securities offered by it pursuant to such Registration Statement; and (B)
no
person or entity guilty of fraudulent misrepresentation (within the meaning
of
Section 10(f) of the Act) will be entitled to contribution from any person
or
entity who was not guilty of such fraudulent misrepresentation.
6.Representations
and Warranties.
(a) The
Common Stock is not registered pursuant to Section 12(b) or 12(g) of the
Exchange Act but the Company files its reports pursuant to Section 15(d)
under
the Exchange Act and, except with respect to certain matters which the Company
has disclosed to the Purchaser on Schedule 4.21 to the Purchase Agreement,
the
Company has timely filed all proxy statements, reports, schedules, forms,
statements and other documents required to be filed by it under the Exchange
Act. The Company has filed (i) its Annual Report on Form 10-KSB for its fiscal
year ended December 31, 2005 and (ii) its Quarterly Report on Form 10-QSB
for
the fiscal quarters ended March 31, 2006 and June 30, 2006 (collectively,
the
“SEC Reports”). Each SEC Report was, at the time of its filing, in substantial
compliance with the requirements of its respective form and none of the SEC
Reports, nor the financial statements (and the notes thereto) included in
the
SEC Reports, as of their respective filing dates, contained any untrue statement
of a material fact or omitted to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The financial
statements of the Company included in the SEC Reports comply as to form in
all
material respects with applicable accounting requirements and the published
rules and regulations of the Commission or other applicable rules and
regulations with respect thereto. Such financial statements have been prepared
in accordance with generally accepted accounting principles (“GAAP”) applied on
a consistent basis during the periods involved (except (i) as may be otherwise
indicated in such financial statements or the notes thereto or (ii) in the
case
of unaudited interim statements, to the extent they may not include footnotes
or
may be condensed) and fairly present in all material respects the financial
condition, the results of operations and the cash flows of the Company and
its
subsidiaries, on a consolidated basis, as of, and for, the periods presented
in
each such SEC Report.
(b) The
Common Stock is listed or quoted, as applicable, for trading on the NASDAQ
Over
The Counter Bulletin Board and satisfies all requirements for the continuation
of such listing or quotation, as applicable, and the Company shall do all
things
necessary for the continuation of such listing or quotation, as applicable.
The
Company has not received any notice that its Common Stock will be delisted
from
or no longer be quoted on, as applicable, the NASDAQ Over The Counter Bulletin
Board (except for prior notices which have been fully remedied) or that the
Common Stock does not meet all requirements for the continuation of such
listing
or quotation, as applicable.
(c) Neither
the Company, nor any of its affiliates, nor any person acting on its or their
behalf, has directly or indirectly made any offers or sales of any security
or
solicited any offers to buy any security under circumstances that would cause
the offering of the Securities pursuant to the Purchase Agreement to be
integrated with prior offerings by the Company for purposes of the Securities
Act which would prevent the Company from selling the Common Stock pursuant
to
Rule 506 under the Securities Act, or any applicable exchange-related
stockholder approval provisions, nor will the Company or any of its affiliates
or subsidiaries take any action or steps that would cause the offering of
the
Common Stock to be integrated with other offerings (other than such concurrent
offering to the Purchaser).
(d) The
Warrants and the shares of Common Stock that the Purchaser may acquire pursuant
to the Warrants are all restricted securities under the Securities Act as
of the
date of this Agreement. The Company will not issue any stop transfer order
or
other order impeding the sale and delivery of any of the Registrable Securities
at such time as such Registrable Securities are registered for public sale
or an
exemption from registration is available, except as required by federal or
state
securities laws.
(e) The
Company understands the nature of the Registrable Securities issuable upon
the
exercise of each Warrant and recognizes that the issuance of such Registrable
Securities may have a potential dilutive effect. The Company specifically
acknowledges that its obligation to issue the Registrable Securities is binding
upon the Company and enforceable regardless of the dilution such issuance
may
have on the ownership interests of other shareholders of the
Company.
(f) Except
for agreements made in the ordinary course of business, there is no agreement
that has not been filed with the Commission as an exhibit to a registration
statement or to a form required to be filed by the Company under the Exchange
Act, the breach of which could reasonably be expected to have a material
and
adverse effect on the Company and its subsidiaries, or would prohibit or
otherwise interfere with the ability of the Company to enter into and perform
any of its obligations under this Agreement in any material
respect.
(g) The
Company will at all times have authorized and reserved a sufficient number
of
shares of Common Stock for the full exercise of the Warrants.
(h) The
Company shall provide written notice to each Holder of (i) the occurrence
of
each Discontinuation Event (as defined below) and (ii) the declaration
of
effectiveness
by the SEC of each Registration Statement required to be filed hereunder,
in
each case within one (1) business day of the date of each such occurrence
and/or
declaration.
7.Miscellaneous.
(a) Remedies.
In the
event of a breach by the Company or by a Holder of any of their respective
obligations under this Agreement, each Holder or the Company, as the case may
be, in addition to being entitled to exercise all rights granted by law and
under this Agreement, including recovery of damages, will be entitled to
specific performance of its rights under this Agreement.
(b) No
Piggyback on Registrations.
Except
as and to the extent set forth on Schedule 7(b) hereto, neither the Company
nor
any of its security holders (other than the Holders in such capacity pursuant
hereto) may include securities of the Company in any Registration Statement
other than the Registrable Securities, and the Company shall not after the
date
hereof enter into any agreement providing any such right for inclusion of
shares
in the Registration Statement to any of its security holders. Except as and
to
the extent specified in Schedule 7(b) hereto, the Company has not previously
entered into any agreement granting any registration rights with respect
to any
of its securities to any person or entity that have not been fully satisfied.
(c) Compliance.
Each
Holder covenants and agrees that it will comply with the prospectus delivery
requirements of the Securities Act as applicable to it in connection with
sales
of Registrable Securities pursuant to any Registration Statement.
(d) Discontinued
Disposition.
Each
Holder agrees by its acquisition of such Registrable Securities that, upon
receipt of a notice from the Company of the occurrence of a Discontinuation
Event (as defined below), such Holder will forthwith discontinue disposition
of
such Registrable Securities under the applicable Registration Statement until
such Holder’s receipt of the copies of the supplemented Prospectus and/or
amended Registration Statement or until it is advised in writing (the “Advice”)
by the Company that the use of the applicable Prospectus may be resumed,
and, in
either case, has received copies of any additional or supplemental filings
that
are incorporated or deemed to be incorporated by reference in such Prospectus
or
Registration Statement. The Company may provide appropriate stop orders to
enforce the provisions of this paragraph. For purposes of this Agreement,
a
“Discontinuation Event” shall mean (i) when the Commission notifies the Company
whether there will be a “review” of such Registration Statement and whenever the
Commission comments in writing on such Registration Statement (the Company
shall
provide true and complete copies thereof and all written responses thereto
to
each of the Holders); (ii) any request by the Commission or any other Federal
or
state governmental authority for amendments or supplements to such Registration
Statement or Prospectus or for additional information; (iii) the issuance
by the
Commission of any stop order suspending the effectiveness of such Registration
Statement covering any or all of the Registrable Securities or the initiation
of
any Proceedings for that purpose; (iv) the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in
any
jurisdiction,
or the initiation or threatening of any Proceeding for such purpose; and/or
(v)
the occurrence of any event or passage of time that makes the financial
statements included in such Registration Statement ineligible for inclusion
therein or any statement made in such Registration Statement or Prospectus
or
any document incorporated or deemed to be incorporated therein by reference
untrue in any material respect or that requires any revisions to such
Registration Statement, Prospectus or other documents so that, in the case
of
such Registration Statement or Prospectus, as the case may be, it will not
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not
misleading.
(e) Piggy-Back
Registrations.
If at
any time during any Effectiveness Period there is not an effective Registration
Statement covering all of the Registrable Securities required to be covered
during such Effectiveness Period and the Company shall determine to prepare
and
file with the Commission a registration statement relating to an offering
for
its own account or the account of others under the Securities Act of any
of its
equity securities, other than on Form S-4 or Form S-8 (each as promulgated
under
the Securities Act) or their then equivalents relating to equity securities
to
be issued solely in connection with any acquisition of any entity or business
or
equity securities issuable in connection with stock option or other employee
benefit plans, then the Company shall send to each Holder written notice
of such
determination and, if within fifteen (15) days after receipt of such notice,
any
such Holder shall so request in writing, the Company shall include in such
registration statement all or any part of such Registrable Securities such
Holder requests to be registered, to the extent the Company may do so without
violating registration rights of others which exist as of the date of this
Agreement, subject to customary underwriter cutbacks applicable to all holders
of registration rights and subject to obtaining any required consent of any
selling stockholder(s) to such inclusion under such registration
statement.
(f) Amendments
and Waivers.
The
provisions of this Agreement, including the provisions of this sentence,
may not
be amended, modified or supplemented, and waivers or consents to departures
from
the provisions hereof may not be given, unless the same shall be in writing
and
signed by the Company and the Holders of the then outstanding Registrable
Securities. Notwithstanding the foregoing, a waiver or consent to depart
from
the provisions hereof with respect to a matter that relates exclusively to
the
rights of certain Holders and that does not directly or indirectly affect
the
rights of other Holders may be given by Holders of at least a majority of
the
Registrable Securities to which such waiver or consent relates; provided,
however, that the provisions of this sentence may not be amended, modified,
or
supplemented except in accordance with the provisions of the immediately
preceding sentence.
(g) Notices.
Any
notice or request hereunder may be given to the Company or the Purchaser
at the
respective addresses set forth below or as may hereafter be specified in
a
notice designated as a change of address under this Section 7(g). Any notice
or
request hereunder shall be given by registered or certified mail, return
receipt
requested, hand delivery, overnight mail, Federal Express or other national
overnight next day carrier (collectively, “Courier”) or telecopy (confirmed by
mail). Notices and requests shall be, in the case of those by hand delivery,
deemed to have been given when delivered to any party to whom it
is
addressed,
in the case of those by mail or overnight mail, deemed to have been given
three
(3) business days after the date when deposited in the mail or with the
overnight mail carrier, in the case of a Courier, the next business day
following timely delivery of the package with the Courier, and, in the case
of a
telecopy, when confirmed. The address for such notices and communications
shall
be as follows:
|
If
to the Company:
|
|
00000
Xxxxxx Xxxxx Xxxxxxxxx
|
|
Xxxxx
000
|
|
Xxxxxxx,
XX 00000
|
|
|
Attention:
Chief Financial
Officer
|
|
|
Facsimile:
000-000-0000
|
with
a copy
to:
Xxxxx
and
Xxxxx LLP
4400
One
Houston Center
0000
XxXxxxxx
Xxxxxxx,
Xxxxx 00000
Facsimile:
(000) 000-0000
Attention:
Xxxxxxx X. Xxxxxx
|
If
to a Purchaser:
|
To
the address set forth under such Purchaser name on the signature
pages
hereto.
|
If
to
any other Person who is
|
then
the registered Holder:
|
To
the address of such Holder as it appears in the stock transfer
books of
the Company
|
or
such
other address as may be designated in writing hereafter in accordance with
this
Section 7(g) by such Person.
(h) Successors
and Assigns. This Agreement shall inure to the benefit of and be binding
upon
the successors and permitted assigns of each of the parties and shall inure
to
the benefit of each Holder. The Company may not assign its rights or obligations
hereunder without the prior written consent of each Holder. Each Holder may
assign its respective rights hereunder in the manner and to the persons and
entities as permitted under the Purchase Agreement.
(i) Execution
and Counterparts. This Agreement may be executed in any number of counterparts,
each of which when so executed shall be deemed to be an original and, all
of
which taken together shall constitute one and the same agreement. In the
event
that any signature is delivered by facsimile transmission, such signature
shall
create a valid binding obligation of the party executing (or on whose behalf
such signature is executed) the same with the same force and effect as if
such
facsimile signature were the original thereof.
(j) Governing
Law, Jurisdiction and Waiver of Jury Trial. THIS AGREEMENT SHALL BE GOVERNED
BY
AND CONSTRUED AND ENFORCED IN
ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND
PERFORMED IN SUCH STATE, WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW.
The
Company hereby consents and agrees that the state or federal courts located
in
the County of New York, State of New York shall have exclusion jurisdiction
to
hear and determine any Proceeding between the Company, on the one hand, and
the
Purchaser, on the other hand, pertaining to this Agreement or to any matter
arising out of or related to this Agreement; provided, that the Purchaser
and
the Company acknowledge that any appeals from those courts may have to be
heard
by a court located outside of the County of New York, State of New York,
and
further provided, that nothing in this Agreement shall be deemed or operate
to
preclude the Purchaser from bringing a Proceeding in any other jurisdiction
to
collect the obligations, to realize on the Collateral (as defined in the
Master
Security Agreement) or any other security for the obligations, or to enforce
a
judgment or other court order in favor of the Purchaser. The Company expressly
submits and consents in advance to such jurisdiction in any Proceeding commenced
in any such court, and the Company hereby waives any objection which it may
have
based upon lack of personal jurisdiction, improper venue or forum non
conveniens. The Company hereby waives personal service of the summons, complaint
and other process issued in any such Proceeding and agrees that service of
such
summons, complaint and other process may be made by registered or certified
mail
addressed to the Company at the address set forth in Section 7(g) and that
service so made shall be deemed completed upon the earlier of the Company’s
actual receipt thereof or three (3) days after deposit in the U.S. mails,
proper
postage prepaid. The parties hereto desire that their disputes be resolved
by a
judge applying such applicable laws. Therefore, to achieve the best combination
of the benefits of the judicial system and of arbitration, the parties hereto
waive all rights to trial by jury in any Proceeding brought to resolve any
dispute, whether arising in contract, tort, or otherwise between the Purchaser
and/or the Company arising out of, connected with, related or incidental
to the
relationship established between then in connection with this Agreement.
If
either party hereto shall commence a Proceeding to enforce any provisions
of
this Agreement, the Purchase Agreement or any other Related Agreement, then
the
prevailing party in such Proceeding shall be reimbursed by the other party
for
its reasonable attorneys’ fees and other costs and expenses incurred with the
investigation, preparation and prosecution of such Proceeding.
(k) Cumulative
Remedies. The remedies provided herein are cumulative and not exclusive of
any
remedies provided by law.
(l) Severability.
If any term, provision, covenant or restriction of this Agreement is held
by a
court of competent jurisdiction to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions set forth
herein shall remain in full force and effect and shall in no way be affected,
impaired or invalidated, and the parties hereto shall use their reasonable
efforts to find and employ an alternative means to achieve the same or
substantially the same result as that contemplated by such term, provision,
covenant or restriction. It is hereby stipulated and declared to be the
intention of the parties that they would have executed the remaining terms,
provisions, covenants and restrictions without including any of such that
may be
hereafter declared invalid, illegal, void or unenforceable.
(m) Headings.
The headings in this Agreement are for convenience of reference only and
shall
not limit or otherwise affect the meaning hereof.
[Balance
of page intentionally left blank; signature page follows]
IN
WITNESS WHEREOF, the parties have executed this Registration Rights Agreement
as
of the date first written above.
By:
/s/
Xxxx X’Xxxxx
Name:
Xxxx X’Xxxxx
Title:
EVP, CFO, & Co-CEO
LAURUS
MASTER FUND, LTD.
By:
/s/
Laurus Master Fund LTD.
Name:____________________________
Title:_____________________________
Address
for Notices:
000
Xxxxx
Xxxxxx, 00xx Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
Xxxxx Grin
Facsimile:
000-000-0000
EXHIBIT
A
____________,
200___
[Continental
Stock Transfer
&
Trust Company
Two
Xxxxxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attn:
Xxxxxxx Xxxxxxxxx]
Re: Blast
Energy Services, Inc. Registration Statement on Form [S-3]
Ladies
and Gentlemen:
As
counsel to Blast Energy Services, Inc., a California corporation (the
“Company”), we have been requested to render our opinion to you in connection
with the resale by the individuals or entitles listed on Schedule
A
attached
hereto (the “Selling Stockholders”), of an aggregate of __________ shares (the
“Shares”) of the Company’s Common Stock.
A
Registration Statement on Form [S-3] under the Securities Act of 1933, as
amended (the “Act”), with respect to the resale of the Shares was declared
effective by the Securities and Exchange Commission on [date]. Enclosed is
the
Prospectus dated [date]. We understand that the Shares are to be offered
and
sold in the manner described in the Prospectus.
Based
upon the foregoing, upon request by the Selling Stockholders at any time
while
the registration statement remains effective, it is our opinion that the
Shares
have been registered for resale under the Act and new certificates evidencing
the Shares upon their transfer or re-registration by the Selling Stockholders
may be issued without restrictive legend. We will advise you if the registration
statement is not available or effective at any point in the future.
Very
truly yours,
[Company
counsel]
Schedule
A to Exhibit A
|
Selling
Stockholder
|
R/N/O
|
Shares
Being
Offered
|
SCHEDULE
7(b)
Outstanding
Share issuances with registration rights:
|
Common
|
Warrants
|
Total
|
|
|
Alberta
Energy Partners
|
3,000,000
|
0
|
3,000,000
|
|
Xxxxx
Xxxxx
|
105,000
|
0
|
105,000
|
|
Xxxx
McAfee Companies
|
82,074
|
0
|
82,074
|
|
BlausenLisi
L.P.
|
35,000
|
0
|
35,000
|
|
Xxxx
Xxxxx
|
26,250
|
0
|
26,250
|
|
Xxxxxxx
Xxxxx Trust
|
116,923
|
0
|
116,923
|
|
Xxxx
Xxxxx Trust
|
38,974
|
0
|
38,974
|
|
Xxxxxxx
XxXxxx P.C.
|
30,000
|
0
|
30,000
|
|
Xxxxxxxxx
Corporate Services LLC
|
135,000
|
0
|
135,000
|
|
Xxxxx
X. Xxxxxxx
|
12,500
|
0
|
12,500
|
|
Xxxxx
Xxxxxxx
|
100,000
|
50,000
|
150,000
|
|
Linden
Growth Partners
|
1,777,950
|
400,000
|
2,177,950
|
|
Xxxx
XxxXxxxxx
|
31,250
|
0
|
31,250
|
|
Xxxx
XxXxxx
|
82,074
|
0
|
82,074
|
|
XxXxxxxxxx
Ltd Partnership
|
100,000
|
0
|
100,000
|
|
Xxxxx
Xxxxxx
|
43,750
|
0
|
43,750
|
|
X'Xxxxx
Capital Partners
|
105,000
|
0
|
105,000
|
|
Xxx
Xxxxxxx
|
55,000
|
0
|
55,000
|
|
Prima
Capital Group
|
60,000
|
0
|
60,000
|
|
ProFab
Equipment
|
33,333
|
0
|
33,333
|
|
Xxxx
Xxxx
|
38,750
|
0
|
38,750
|
|
Xxx
Sofia
|
0
|
10,000
|
10,000
|
|
Xxxxxxx
Xxxxxxxxxxx
|
900,000
|
0
|
900,000
|
|
Colt
Xxxxxxx
|
0
|
20,000
|
20,000
|
|
Xxxxxx
Xxxxxx
|
107,500
|
0
|
107,500
|
|
Xxx
Xxxxxxxx
|
38,750
|
0
|
38,750
|
|
Xxxxxxxxx
Xxxxx Trust
|
38,974
|
|
38,974
|
|
7,094,052
|
480,000
|
7,574,052
|
|
|
Shares
issued to Rig Sellers:
|
|||
|
Xxxxx
X. Xxxxxx
|
1,631,250
|
562,500
|
2,193,750
|
|
Xxxxxxx
Xxxxxxxx
|
2,051,250
|
362,500
|
2,413,750
|
|
Xxxxxx
Xxxxxxx
|
1,725,000
|
250,000
|
1,975,000
|
|
Xxxxxxxx
Family Irrevocable Trust
|
0
|
0
|
0
|
|
Xxxxxxxx
Business Security Trust
|
11,092,500
|
3,825,000
|
14,917,500
|
|
Second
Bridge LLC
|
900,000
|
0
|
900,000
|
|
22,400,000
|
